Really Confused About Our Mortgage.

chirpychick

Hi, Ive never posted here so if i do something wrong feel free to correct me.


I have 2 questions 1 short 1 long.

Short question: Everyone keeps telling me that when you have a mortgage you *have* to have some kind of insurance policy that states if one of you dies then the mortgage will be paid off? Is this true or not? Hubby tells me no its not true as we dont have such a policy on our mortgage. (although im thinking it would be a very good idea! - ive no idea how to come about it if we dont have one).

Long question: Hubby used to deal with all the bills, when we entered into the IVA this became my job, however our Mortgage was a fixed deal which we took out with Santander (alliance and leicester then) in Feb 2007. I have never had anything to do with this, but our fixed deal ends in Feb 2012 and im begining to worry about it.

Because we are in the IVA now hubby says that our mortgage will just go from being fixed to being variable at the standard rate as we wont be able to remortgage. Is this correct?

Also how do i know then what our monthly payments are likely to be and is there any way of knowing in advance if these payments are going to go up or go down? If they go up i figure Payplan arent going to amend our repayments just like when other policies go up. So if they go up we are going to be in trouble financially again. I am pretty scared about this.

Is there any option to go on interest only if you are in an IVA? if so what affect will this have on the mortgage and is there a time limit for doing so? And if we are paying less on the mortgage will payplan want more money from us?

im so confused and very scared as although the IVA is very hard its the most sensible we have been financially ever and has taught us so much, i couldnt face the prospect of losing our house again, it was hard enough the first time, especially as this is potentially out of our control.

If you could help i would be very grateful. If this is in the wrong place please point me in the right direction.

TIA

Thrugelmir

chirpychick wrote: »

Short question: Everyone keeps telling me that when you have a mortgage you *have* to have some kind of insurance policy that states if one of you dies then the mortgage will be paid off? Is this true or not? Hubby tells me no its not true as we dont have such a policy on our mortgage. (although im thinking it would be a very good idea! - ive no idea how to come about it if we dont have one).

Long question: Hubby used to deal with all the bills, when we entered into the IVA this became my job, however our Mortgage was a fixed deal which we took out with Santander (alliance and leicester then) in Feb 2007. I have never had anything to do with this, but our fixed deal ends in Feb 2012 and im begining to worry about it.

Because we are in the IVA now hubby says that our mortgage will just go from being fixed to being variable at the standard rate as we wont be able to remortgage. Is this correct?

Having life assurance is advisable. More so if you have children or one partner would struggle to pay the bills. Doesn't cost a fortune for very straightforward cover. A close friend of mine died some years back at the age of 39, after suffering a brain tumour.

You will drop onto A&L's SVR at the end of the fixed term. I'm unsure if Santander have reduced this to their SVR of 4.24%. So may be worth checking up.

You need to address your current issues before considering remortgaging. As this will count against you. Lenders are now far tougher in their approach to borrowers than a few years ago.

Keep battling on. You will get to the end of the tunnel. Even if it seems a long way to go at present.

handytips

Without checking i think it is 4.79% you will also find it a very difficult task to remortgage due to the IVA. Good luck

kingstreet

You should find towards the end of the current fix Santander writes to you with a few options. These are celled retention products and will probably include a fixed rate or two for you to pick from. There are normally no status requirements attached to these options, so the IVA will not be an issue.

Note - A&L borrowers have to stay on the A&L SVR until they move to a retention product with Santander. When that ends, they revert to the lower Santander SVR.